A bleak week beckons with too many fires to fight

Governor of the Bank of England Andrew Bailey is almost certainly going to hike interest rates on Thursday (Frank Augstein/PA) (PA Wire)

This is shaping up to be a tough week for the economy.

It started this morning with government number crunchers revealing a 0.3% slide in GDP in April. This was considerably worse than expected.

Tomorrow’s labour market figures are likely to underline how quickly living standards are falling as wages once again fail to keep pace with inflation.

Then comes the sucker punch on Thursday when the Bank of England (BoE) looks certain to hike interest rates once again, this time to at least 1.25% — and possibly 1.5% — a 13 year high.

It all adds to the sense of a gathering storm that the CBI’s pleading for an urgent government pivot to a growth agenda will do nothing to avert — not in the short term at least. The government is simply fighting too many fires on too many fronts — from the Northern Ireland protocol to the fuel price explosion — to have much  hope of stopping the recession juggernaut heading down the track.

Probably the best that can be hoped for is a relatively shallow downturn over the autumn and winter with a return to more “normal” energy prices providing respite as fighting in the Ukraine comes to an end. But there are plenty of far bleaker scenarios.

Ironically even this year’s biggest “feelgood” event — the Queen’s Platinum Jubilee celebrations — will not help as the extra day’s holiday will slice another fraction off a percentage point off output for June.

Let’s hope England and Wales can do their fans proud at the Qatar World Cup in November. We will all be needing a lift by then.